The crypto Exchange Traded Fund (ETF) market is gradually heating up, as more institutions vie to become the first to offer a Bitcoin ETF. Now, asset management firm Valkyrie is the latest to attempt plying its trade on the market after filing a registration with the Securities and Exchange Commission (SEC).
This is coming as a host of investment fund managers are trying to take advantage of the current increased retail interest in cryptocurrencies.
The firm, based in Texas, is proposing to list its Valkyrie Bitcoin Trust on the New York Stock Exchange, although the filing doesn’t include any proposed trading ticker.
But, SEC’s approval is a major issue the company has to face, as the regulator is not known to show much support for tradable funds.
The SEC has rejected multiple filings for Bitcoin ETFs in the past, and there is a slim chance for this one to scale through, going by the regulator’s history.
Several companies, including ETF giants Direxion and VanEck, filed proposals for a Bitcoin ETF with the SEC during the last Bitcoin bull run. The Winklevoss’s owned crypto service Gemini also filed for Bitcoin ETF at the time. However, the SEC did not approve any of the proposals.
SEC still reluctant to approve proposals
According to Kryptoin Chief Executive Officer Donnie Kim, who also led the filing for his firm in October 2019, the SEC has a history of rejecting proposals for Bitcoin ETFs.
He added that the commission is not very sure of the modalities and feasibility of the new asset class, and it’s still in the holding pattern at the moment. It may be reluctant to approve proposals for a new market it hasn’t clearly understood or determine how it will impact the existing products in the market. As a result, the SEC is keeping everyone on hold until it completes its homework on the asset class.
Race to launch ETF product intensifies
Even with the issues, companies have faced in the past when it comes to getting approval, others want to still give it a try.
That’s more probably because of the increased interest in retail cryptocurrency trading. As a result, crypto fund managers are competing to be pioneers of an ETF product, known what they stand to gain if they succeed.
VanEck was the first-ever firm to file a proposal for a Bitcoin ETF, and it has not stopped trying to get approval. It has already filed to launch a Digital Asset ETF to measure the activities of the Global Digital Assets Equity Index, largely dominated by cryptocurrency service firms.